AFIA in favour of biofuel policy change

Federal regulators in the US should temporarily waive
the Renewable Fuels Standard (RFS) and lower the current national RFS mandate to
the 2007 level of 4.02% through 2009, according to the American Feed Industry
Association (AFIA). This year's RFS mandate is 7.76%.

AFIA expressed its support for changes to the country's biofuels policy in a
letter filed with the Environmental Protection Agency (EPA) this
week.

The letter to Stephen Johnson, EPA administrator, was timed to
coincide with the agency's consideration of a request by the governor of Texas
to reduce the 2008 RFS mandate in that state by 50%.

Federal energy law
allows a state or territory to petition the EPA administrator to ask for changes
to the RFS; the EPA then has no more than 90 days to respond. When the EPA
published the Texas governor's request, it said there would be a 30-day comment
period.

The governor's request for a 50% rollback of the RFS applies only
to his state, and it was filed before the Midwest floods.

Some industry
observers believe several additional governors also will file requests for
relief from the RFS.

Allowing time to adaptReforming the
biofuels policy enacted last year "would allow time for the marketplace to adapt
to the rapid increase in commodity and feed prices, magnified by the recent
floods in the Corn Belt, and will permit the market to determine the degree to
which corn stocks should be divided amongst the producers and consumers of food,
livestock feed, exports and ethanol," according to the AFIA
letter.

Ensuring adequate supplies of food for humans and feed for
livestock is at least equally as important as energy security, AFIA President
and CEO Joel G. Newman wrote.

"US livestock producers and the feed
industry have taken the brunt of the increase in corn, soybean and grain prices
over a relatively short time frame," he said in the letter, but the livestock
sector "is not an industry that can transition easily or quickly in times of
higher costs."

Unique businessThe "unique nature of the
business means livestock producers have a difficult time reacting to sudden
changes in the marketplace, and they cannot decide to reduce or close operations
similar to the way a typical manufacturing business can," Newman
wrote.